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Archive for 19 May 2012

This will end in tears…

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Union upset at new meat inspection rules

Newstalk ZB May 19, 2012, 10:17 am

The union for public servants is unhappy at new rules allowing meat companies to inspect their own produce.

The Ministry for Primary Industries is going ahead with the scheme, after consulting our main trading partners.

Until now, meat inspections have been done by government officials employed by AsureQuality.

The PSA’s Richard Wagstaff says inspectors are telling him there’s already pressure on them to speed the process up.

“They think that if they didn’t have an independent warrant and didn’t work for a separate company, the pressure that would come to bear on them would be impossible to resist.”

The union is also worried about the inspectors’ jobs.

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Self-inspection?!

Where have we heard this before…?

As it happened: Pike River Mine Inquiry day four

Published: 8:35AM Thursday July 14, 2011 Source: ONE News

12.47pm: A letter written to the Ministry of Energy by [Harry Bell – Former Chief Inspector of coal mines ] Bell in 1997 is bought up as evidence. He confirms that he still holds the views expressed in the letter. He wanted the Mining Inspection Group (MIG) to stay within the Ministry Of Commerce. Marine and aviation industries had been left out of the new Occupational Safety and Health regulations, and he believe that mining also should be left out. “Mining is an entirely different industry to shops and factories.” That letter came at the end of the transition process, but Bell says it was a view that had been expressed from the beginning. “All the inspectors did, but nobody listened, they had already made their minds ups.”

12.45pm: Bell says that mines cannot be audited ‘on paper’ – mines need to be physcally inspected. He says that a lack of regular inspections was a “Recipe for disaster”.

12.42pm: Bell says he has had concerns about the closure of dedicated mine training through polytechs with regular standards set by the Board of Examiners, made up by experienced miners. He has concerns that students are not orally examined, with students not checked that they understand any work that they have completed.

12.39 pm: He says that under the new regime there was only one inspection in one year at a mine he managed. “A reactive response is not appropriate for the underground coal mine industry.”

12.34 pm: Bell says, “The Pike River plans should never have been approved, and in my opinion would not have been approved in the prior regulatory environment.” He says he believes the Pike River disaster can be attributed in some part to human error, lack of inspector experience, and lack of inspections.

12.32 pm: He says that since 1993 calibre of the OSH (Department of Labour) inspectors has slipped dramatically, and that management and the miners are left to self regulate. Today the inspectors are not experienced with gassy mines or the management of roles. He says a factor in this was that salaries were cut – experienced miners would no longer take the role.

See: TVNZ – As it happened: Pike River Mine Inquiry day four

In 2010, New Zealand’s meat industry earned $5.7 billion in exports.

Our entire reputation as a reliable, dependable, and safe source of food has been based not just on our relatively clean and mostly unpolluted environment – but also on our strict inspection regime.  Up until now, meat inspectors have been independent and impartial, giving fear nor favour to no one.

History has shown that where an industry is left to self-regulate, that problems will occur.

Self-regulation is not a bright idea. In fact, it stinks like meat offal left out in the noon-day sun.

Next, the multi-billion dollar leaking-homes scandal,

”  I think that is important that we accept that we have a Government—not just this Government—and a whole lot of people who have the mantra of deregulation and self-regulation. We are being told, everywhere we turn, that self-regulation and deregulation will work. We do not need all this onerous regulation. This leaky home disaster is an abject lesson in what happens in the huge cost of deregulation.

What did this 1991 Act do?

The aim of it was to encourage competition in the market, to boost the building industry, to reduce building costs, and to save money. Everyone whipped themselves into a fervour about the wonderful things that would happen with the passage of the Building Act and deregulation. They wiped out all the previous regulations and controls, they loosened councils’ inspection procedures, and they allowed the introduction of private council inspectors, so that there would be competition with council inspectors. 

See: Green Party –  Leaky Homes caused by deregulation

It does interest me that the building sector has, indeed, self regulated since 1821 (when New Zealand’s first house was built — Kemp House — nearly 200 years ago).

Self regulation is where an industry has Codes of Practice — eg, training standards, self monitoring and/or voluntary accreditation systems — like the Registered Master Builders Federation which imposes entry standards and criteria upon membership.

Yet, it is only now that the Government has deemed it necessary to regulate the building occupation, and then, only the residential sector due primarily to the leaky homes saga

Mind you, we don’t start being “regulated” until March 1, 2012, so we are, indeed, still self-regulating.

See: Building Today – What is the actual Licensed Building Practitioner scheme?

Self-regulation in a commercial environment is not a good idea. There are simply too many pressures brought to bear on Inspectors, and eventually a culture of short-cuts and turning a blind eye develops.

As usual, this daft proposal emanates from  National – a party in power that penny-pinches and cost-cuts, and exposes New Zealand’s economy to dire risks.

Unfortunately, as with the ministerial architects of the 1991 Building Act “reforms”, those who legislate; de-regulate; and self-regulate are not the ones who will be held to account when something goes horribly wrong.

As usual, the politicians responsible will not shoulder responsibility – and it will be the taxpayer who foots the bill to fix whatever mess eventuates.

Self-regulation in the meat industry. Not a good idea. In fact, it’s a dumb idea.

This will end in tears. Again.

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Related blogposts

Bugs and balls-ups!

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The National Party, common sense, and sausage sizzles

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Frank Macskasy Blog Frankly Speaking

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I’ve been involved in politics, in one form or another, for much of my life. I think I have a fairly good ‘handle’ regarding politicians; their ideologies; and their Parties.

I’ve seen Muldoon come and go; Bolger and Richardson; Shipley and English; and now Key and English, try their hand at managing our economy and spending our tax dollars.

Without exception, folks, every single National Government, from Robery Muldoon onwards, has been an apallingly bad fiscal manager.

National’s modus operandi,

  1. Cuts short term spending, worsening long-term social problems, which will become more expensive eventually, as social ills remain unaddressed,
  2. Cuts state sector employees and services, then realises that essential issues still remain,
  3. Cuts taxes when we can least afford it,
  4. Implements fiscal, political, and social policies that impact negatively on economic and social indicators,
  5. Borrows from overseas lenders when it was never necessary in the first place (or reduced borrowing, had tax cuts not been implemented)
  6. And generally makes bad choices that, long term, will cost the taxpayer more.

So – how on Earth has National ever built up a reputation of being a “sound fiscal manager” of our economy?!?!

Because every time National has been in office, it has left the country in an absolute economic shambles.

From Ruth Richardson’s “Mother of All Budgets”, to Jenny Shipley’s and Bill English’s “slash and burn” of the health sector,  state housing, Police force, and other essential state services in the late 1990s – National  has proven time and again it’s ineptness.

This Party is utterly clueless when it comes to simple matters of cause-and-effect.

One thing, though, has escaped me utterly.

How have they  sucked in the public to effect a (undeserved) reputation of sound fiscal management?

Whilst National runs deficits,  Labour, in the 2000s, ran surpluses. (A fact National attempts to hide by clumsily  persisting in re-writing history.)

See previous blogpost: Labour: the Economic Record 2000 – 2008

Case in point; Dear Leader and his minions has made a great deal about slashing the state sector. National has made deep cuts into state sector services and sacked over 2,500 much-needed employees,

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Frank Macskasy Blog Frankly Speaking

Full Story

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As 2,500 people were sacked from their jobs – all for a grand saving of $20 million,  National belatedly realised that their slash-and-burn was little more than a false economy.

It soon became apparent that many of the sacked workers were much-needed experts in their field, and essential personnel to make the State function smoothly.

National took “appropriate action”,

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Frank Macskasy Blog Frankly Speaking

Full Story

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Frank Macskasy Blog Frankly Speaking

Full Story

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Frank Macskasy Blog Frankly Speaking

Full Story

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Two thousand, five hundred of our fellow kiwis lost their jobs for “savings” of $20 million.

The Economic Development Ministry alone  increased spending on consultants, contractors, etc,  from $6.7 million in 2008-09 to $19.2 million in 2010-11. Other ministries most likely spent several million on their consultants, contractors, advisors, and Uncle Tom Cobbly.

See: ‘Consultancy culture’ cost $525m last year – Labour

So much for “savings” of $20 million.

One can only try to imagine what those 2,500 people who were sacked by National, must be feeling right now.

So the question remains; how has National managed to paint itself as a “responsible steward” of the country’s economy? Especially when a cursory study of their real performance reveals otherwise?

Tracey Watkins, writing in today’s (19 May)  ‘Dominion Post‘, may have  offered a clue,

But while these sorts of measures might be an annoyance, they do not cause widespread pain.

And in a perverse way, Europe helps Bill English’s cause. It maintains a sense of crisis while the sight of workers marching in the streets only underscores the gentle and low-fuss nature of our own austerity drive.

This is why Labour has struggled so far to run a coherent argument against National’s management of the books – the danger has always been that protesting any cuts to date look not only shrill, but profligate. To voters, less is more at the moment.

See: Kiwis are tolerating moderate austerity

A sense of crisis “. It may well be that the Middle Classes have been panicked by overseas events. There may be an under-lying fear that – like households in tough times – the country needs to cut back on spending, to avert a Greece-like melt-down in our own economy.

There may be an underlying belief  within the collective consciousness of New Zealanders that, in “tough times”, National is better at cutting than Labour. In “tough economic times”, cutting expenditure may appear to the public as more of a priority than, say, job creation.

Such feelings are not necessarily based on any reality or logical analysis of the country’s true economic situation; nor of the side-effects of cutting back on State expenditure. These may be deep-seated feelings based on how people may view the economy.

Generally speaking, people have very little experience with macro-economics; Keynesian-vs-Friedmanite economic systems; nor any real understand of how government economic policies work.

For most folk, their only experience is running the finances of their own households. Doing a household budget; paying bills;  and balancing the chequebook is the extent to most peoples’ exposure to finances.

And yet, government finances is not like household finances at all. The former is more complex, with control over fiscal and taxation policy; revenue streams;  and policies that can work to generate income for the state. The State has access to borrowings (if necessary) not open to ordinary households. By widening the tax-base, the State can increase its revenue – no easy task for ordinary households.

In short, the State has options not readily available to households.

But  through a dumbed-down media which focuses mostly on superficial political issues; mindless entertainment; and on the Here-And-Now, the public have become low-information voters.

By not being aware of the true extent of the State’s abilities, the public are trapped in a narrow paradigm of  the State being akin to “household budgets”.

So when National cuts expenditure, services, and jobs – it appears to the public to be a “common sense” plan to follow.

The public are not so aware that austerity measures can have negatives impacts on our economy and society, even in the short-term. Cutting back on government economic activity means a drop in all-round economic activity.

It is no coincidence that following Ruth Richardson’s “Mother of all Budgets“, that unemployment, company liquidations, economic growth, and other indicators worsened.

This is a Party that I would barely trust to run a sausage sizzle. They’d get rid of the volunteers; sell the barbeque; pay themselves a hefty fee; and claim success,

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The ‘mother of all budgets’

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Frank Macskasy Blog Frankly Speaking Mother of all budgets

Prime Minister Jim Bolger and Finance Minister Ruth Richardson make their way to the House of Representatives for the presentation of the 1991 budget. Richardson was from the radical wing of the National Party, which promoted individual liberty and small government. This was reflected in the budget, which severely cut government spending, including on welfare. Richardson proudly proclaimed her plan as the ‘mother of all budgets’, but such was its unpopularity among voters that it – along with high levels of unemployment – nearly cost National the next election.

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Frank Macskasy Blog Frankly Speaking

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Frank Macskasy Blog Frankly Speaking

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In the above graph, note the two ‘spikes’ in unemployment. The first in the early 1990s, after cuts (through the “Mother of all Budgets”)  created a rise in unemployment. The second rise occurred in the late 1990s, when the Shipley/English government again cut government services.

However, unemployment fell after the election of a Labour-led government in late 1999.

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Frank Macskasy Blog Frankly Speaking

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The implications of austerity policies should be crystal clear to everyone:  reducing government expenditure and activity in the economy dampens overall economic activity.  Everyone is affected – no one escapes the inevitable downturn.

Hence why the new French President, Francois Hollande, has rejected austerity policies for his country. President Hollande understands full well that cutting government expenditure will result in reduced state services; more unemployment; and a drop in economic activity and  growth.

As long as the public are aware of these facts, then they can make decisions accordingly.

Ignorance of these facts will be painful, as anyone with memories of the 1990s will attest to.

In this case, ignorance is not most definitely not ‘bliss’. And no one will be exempt.

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Additional

Dominion Post: Public service cuts get deeper

Bloomberg:  Hollande Vows to Fight Austerity After Beating Sarkozy

References

Te Ara: Story – Business failures and corporate fraud

Te Ara: Story – National Party

Trading Economics: New Zealand

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National – The End is Nigh (Part #Rua)

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Frank Macskasy Blog Frankly Speaking

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As this blogger has been predicting over the last few months, National is continuing to slide in the polls, and will most likely face electoral defeat at the next elections.

National’s drop in popularity can be attributed to several, distinct factors,

  1. Economic factors continuing to worsen; rising unemployment; stagnant economy; ballooning government debt
  2. No obvious plan from National to create jobs and get the economy moving again
  3. Constant cuts which seem to achieve nothing, and which are beginning to impact of social services
  4. Unpopular policies such as asset sales
  5. A growing perception that National is demonising unemployed workers and solo-mothers, and treating them as scapegoats for government-failures
  6. Scandal after scandal after scandal – with the John Banks-Dotcom affair being the worst example of political pragmatism trumping ethical decision-making by Key

All of which happened in the late 1990s, with the previous Bolger/Shipley-led National governments,

See previous blogpost:  Learning from history?

See previous blogpost:  Learning from history?

See previous blogpost:  History Lesson – Toru – Jobs

See previous blogpost:  History Lesson – Rua – Police

A Roy Morgan poll released today (Friday 18 May)  shows a distinct drop for National and rise for Labour.

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2011 Election Results

National: 47.31%

Labour: 27.48%

Greens: 11.06%

Mana: 1.08%

Maori Party: 1.43%

United Future: 0.60%

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Roy Morgan Poll for 2 April 2012 – 15 April 2012

National: 49.5%

Labour:  26.5%

Greens: 12.5%

NZ First: 6.5%

United Future: 1%

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Current: Roy Morgan Poll for 30 April  – 13 May 2012

National: 44.5%

Labour:  30%

Greens: 15%

NZ First: 5.5%

Maori Party: 1%

Mana Party: 0.5%

ACT: 0%

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A Labour-Green-NZ First Coalition would equal 50.5%, giving 61 seats in a 120 seat Parliament (no allowance made for potential overhangs). With Hone Harawira winning Te Tai Tokerau, and giving his vote for Supply & Confidence to a Labour-led, government, a possible coalition would have a two seat majority.

This blogger believes that National will continue to trend down in further polling, and a Labour-led coalition will increase it’s majority.

Furthermore, this blogger predicts,

  • ACT will not return in the next election
  • Colin Craig’s Conservative Party will not break the 5% threshold
  • Peter Dunne has a less than 50/50 chance of  holding his Ohariu electorate if he votes with National to privatise state owned corporations

We are seeing the decline of National, and the last term of John Key as Prime Minister.

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References

NZ Herald: Key says he’ll quit politics if National loses election

NZ Herald: National support slips further – poll

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